“The Group has delivered another robust set of results with the business performing well in a challenging business environment. We are successfully meeting the affordability challenge with both improved returns for shareholders and lower costs for our customers. There continues to be sustainable growth prospects across our markets and we have a clear strategy which provides confidence in the resilience and strength of our business.”

Ian King, Chief Executive BAE Systems

• Robust full year results
o Headline sales £22.4bn, up 1.8%
o Underlying EBITA £2,214m, up 0.8%
o Underlying earnings per share 40.8p, up 1.7%
o Cash flow from operating activities £1,535m
o Dividend for full year up 9.4% to 17.5p

• Strong balance sheet and balanced use of capital
o Continued commitment to a policy of dividend growth
o Strategy of organic investment and selective acquisitions
o Reduction in pension funding obligations
o £500m of acquisitions scheduled to complete in the first half of 2011

• Higher growth Services activities delivered 48% of sales in 2010
o Substantial presence in Services, underpinning the Group’s resilience and strength
o Support for legacy platforms and current production programmes is core to Readiness & Sustainment activities
o Good growth potential in Cyber and Intelligence, bolstered by targeted acquisitions – L1 Intelligence Services Group, stratsec.net and planned acquisitions of ETI A/S and Norkom

• Clear strategy for future profitable growth
o Invest and grow in Services
o Invest and grow in Electronic Systems
o Sustain our Platform positions
o Grow in existing and develop new home markets
o Grow our export business
o Implement efficiency programmes